Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Neil J. Wilkof, Annsley Merelle Ward, Nicola Searle, Eleonora Rosati, and Merpel, with contributions from Mark Schweizer. Read, post comments and participate! E-mail the Kats here

The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Sunday, 28 February 2010

Open Source Software Targeted by IIPA - The annual Special 301 Report, a report compiled by the US Trade Representative (USTR) that reviews foreign IP laws, consists of a watch list of countries that do not possess adequate and effective intellectual property protection (think Axis of Evil except for IP protection). Countries that don't pass the muster are placed on a Priortiy Watch List, Watch List and/or Section 306 Monitoring status. The process has been criticized in the past for being biased towards submissions of multinational pharmaceutical companies and the entertainment industry. To counter criticism, this year the USTR has been accepting public comments in preparation of the report (to see the submissions so far click here). One of the organizations that is greatly influential in the process is the International Intellectual Property Alliance (IIPA) which consist of the RIAA, MPAA and BSA. The IIPA's submissions this year have condemned countries like Indonesia, Brazil and India for encouraging adoption of open source software which, according to IIPA, creates "trade barriers" and restrict "equitable market access" for software companies. For further information regarding IIPA's submission see these articles in Ars Technia and the Guardian. Unfortunately we will have to wait for the Report to conclude whether or not the USTR's declaration of greater public involvement has actually been achieved and whether Indonesia, Brazil and India will indeed appear on the watch list. To submit your own comments follow the instructions here.

Facebook awarded patent for feed - Last week Facebook was granted a patent for their News Feed or as the USPTO knows it a method for "Dynamically providing a news feed about a user of a social network". Commentators have questioned how this will impact other social media forums. According to this report in the San Francisco Chronicle, Facebook have not commented how this will impact rival products such as Twitter's "What's Happening", MySpace's "What are you doing now?" and LinkedIn's "Network Updates". A Facebook statement declared that the launch of the news feed in 2006 was a "pivotal moment in Facebook's history and changed the way millions of people consumed and discovered information on the site...We're humbled by the growth and adoption of News Feed over time and please with it being awarded the patent."

UPDATE: Rosetta Stone's Adwords Case - Last week at the IBIL conference, the AmeriKat was asked about the status of the Adwords cases in the U.S. As reported by the AmeriKat here, the latest case that replicates the issue in the Rescuecom case (the judgment of which was vacated last summer due to a misapplication of the 1-800-Contacts.com case), is the Rosetta Stone v Google case. According to the dockets, the parties have undergone a final pre-trial hearing and the trial is currently set for six days from 3 May 2010. The AmeriKat will keep readers apprised of any developments.

Over the past month the AmeriKat has suffered through a toxic cocktail of work, revision and weekend exams. Now that the latest tranche of LPC exams are over until May, the AmeriKat spent this past week slowly returning to the land of the living. While she was suffering through this chaotic month, one of her good friends was halfway across the world enjoying three weeks of bombacious adventure and travel throughout Mexico (left). She was admittedly jealous of his adventure, but knowing his inevitable return to our rainy island coincided with his professional entry into the legal world of Magic Circle firms her green-eye of jealously was less severe. When she finally saw him this week, fresh from the Mexican sun, she thought she would be talking him down from the ledge of impending law firm doom. Instead, to him, the end of his travel only signalled a new and exciting beginning.

Cries of "It's not fair!" drown the final fairness hearing

Google may be also dreaming of a new, fresh beginning for themselves after enduring the past month. These past few weeks have witnessed, amongst others, the Google Book Settlement fairness hearing, a patent lawsuit, a class action privacy suit and three of their directors receiving suspended sentences in Italy. The AmeriKat, although critical of Google in the area of copyright law, is strangely beginning to feel slightly sorry for them. February also saw the European Commission commencing a preliminary anti-trust investigation into Google following three complaints made against them. Google stated that one of these complaints was from their rival, Microsoft.

Microsoft was also one of the numerous amicus curiae in opposition of the Google Book Settlement, who's final fairness hearing took place two weeks ago before Judge Denny Chin (see here for the transcript). Opponents to the settlement outnumbered those in support 3 to 1. The AmeriKat's baited breath was, unfortunately but not unexpectedly, stifled when Judge Denny Chin (right) told the packed courtroom that he was not going to rule on the settlement during at the end of the hearing or, indeed, any time in the very immediate future.

"To end the suspense, I'm not going to rule today. There's just too much to digest. And however I come out, I want an opinion that explains my reasoning."

With 28 parties appearing at the hearing, Judge Chin ran a tight courtroom schedule to which any soccer mom would have been proud. Judge Chin gave the parties five minutes to speak, including Microsoft and Amazon.com. Tom Rubin, Microsoft's chief intellectual property lawyer, argued that if the settlement was approved other companies would be penalized and put at a competitive disadvantage for following copyright law. Unlike Google, other companies had asked permission from authors and publishers prior to scanning works in similar projects. He stated

"Google by comparison took a short cut by copying anything and everything regardless of copyright status. They're like a trucking company that instructs its drivers to go 90 miles an hour. It's not surprsing that competing companies that obey the speed limit can't keep up."

As reported by the AmeriKat here, the DoJ's filing attempted to strike a balance between recognizing the benefit of the Google Book project with that of the serious copyright and competition concerns the Amended Settlement Agreement (ASA) presents. According to reports of the hearing, the DoJ's oral submissions, given by William Cavanaugh, were much more critical. The majority of the DoJ's submissions relied on the ASA being outside the scope of Rule 23. The DoJ cited the cases of Amchemand Firefighters in support of this contention and stated that the ASA went beyond the original pleadings, did not spring from the original dispute and is not consistent with underlying copyright law. The ASA, the DoJ contended, was a forward-looking commercial model and not a settlement that only went so far as was necessary to remedy the underlying dispute. Therefore, the DoJ submitted, the ASA was a misuse of Rule 23.

"These forward looking business transactions are not designed to remedy the alleged harm created by those, and it produces benefits to Google that Google could not achieve in the marketplace because of the existence of orphan works.. . The class representatives here, your Honor, have a relatively narrow focus and duty: To litigate the claims presented or settle the claims presented. Millions of authors and publishers around the world did not hire these class representatives to serve as their literary agents for purposes of their broad digital rights."

At the end of the hearing, Google's lawyers told Judge Chin that the settlement was not perfect but that it was fair. According to this report from CNET, Google made it clear that they were interested in obtaining the rights to use and profit from orphan works (see these AmeriKat articles here and here for more information). Google indicated that the money received from the orphan works would enable their digital library to be a feasible business. The AmeriKat is unsure why the illegal use of orphan works by Google is somehow remedied by the fact that such use would enable a feasible business model. Again, the AmeriKat is exasperated by this issue of orphan works and the Google Book Settlement. Their use is illegal, and absent any legislative measures or intervention by the US or EU, companies like Google will attempt to use them for profit which not only violates copyright law but will cause inevitable anti-competitive complaints being brought, like those by the DoJ and Microsoft.

In the AmeriKat's opinion, the court should not enable class action settlements to be used as a vehicle for a party's circumvention of national and international copyright law. The AmeriKat hopes that Judge Chin will take this opportunity to formally address thenumerous problems with the ASA and reject the settlement in its current form. Until then, however, the "jury" is still out on this one and we will have to await Judge Denny Chin's verdict.

For a great summary of the oral arguments presented at the hearing see this linkhere.

Friday, 26 February 2010

Friday's the day to check the IPKat's side bar for evidence of exciting new events. Quite a few have been added since last week, the Kats are pleased to say.

Here's a little news about one member of the IPKat's blogging team. Team member Jeremy has spent a very hectic past three years as a general Intellectual Property Consultant to London-based law firm Olswang LLP. From 1 May 2010, while he will remain Intellectual Property Consultant to the firm, his involvement there will henceforth be focused on specific projects only and he will be working principally from home. his change will free up some precious time for the development of Jeremy's beloved IPKat and related weblogs, for greater freedom to participate in conferences and seminars and for the resumption of some of the teaching and research activities which lay at the heart of his original career as an academic. Jeremy's contact details remain unchanged, as does his enthusiasm for intellectual property. The most perceptible change is the appearance of some more white spaces in his diary ...

In July 2009 the IPKat reported on the German dispute, Rapidshare v Gema (see earlier post here), in which the Regional Court of Hamburg fined file-sharing site RapidShare AG 24 million Euro for copyright infringement in respect of 5,000 tracks which had been shared through the site. In a further decision earlier this month six publishers (including John Wiley, Cengage and McGraw-Hill) were awarded an injunction against Swiss-based Rapidshare, ordering the company to prevent illegal file sharing of 148 copyright-protected works. The court added that Rapidshare must monitor its site (i) to ensure the copyright material was not being uploaded and (ii) to prevent unauthorised access to the material by its users. According to reports, the three-judge court warned that violations could cost the company up to €250,000 on top of the €7.2m in legal fees for the plaintiffs. The IPKat's friend Alexandra Hardy (Orion Publishing Group) wonders:

"Do you or any of your German-reading colleagues have any insight re the Rapidshare decision in Germany last week? UK publishers are naturally very excited by it ... but I doubt this marks the end of P2P as we know it!"

Erasing David, despite its name, has nothing to do with the predicted fate of UK Minister for Higher Education and Intellectual Property David Lammy MP following the next General Election: it's a film from British film-maker David Bond, which vividly illustrates how widely and easily information about us is available from a variety of sources. Bond attempts to disappear for a month, leaving no trace. Before he goes, he hires two private investigators to track him down by any means necessary. The film follows the battle of wits as the two investigators close in on their fugitive. Details of an exclusive screening of this film can be found on the Datonomy data protection website here. Popcorn, hot-dogs and ice-cream will be available too.

Congratulations are offered to the Class 99 design law blog, set up last summer by the IPKat's friend David Musker. Class 99 has now just reached the 200 mark for its email subscriber list. With a nine-person international team commenting on design law issues from Europe and sometimes even beyond, the weblog has secured something of a following, which is nice ...

There are another five tips for actual or prospective writers on IP subjects, sitting quietly on thejiplp weblog and waiting for someone to take them seriously.

In England and Wales a competition is held to select the next batch of Queen's Counsel, barristers whose seniority and expertise is recognised and who become entitled to bear the letters "QC" ("KC" when the reigning monarch is a King) after their names. Details of the competition and how it is run can be found on the QC applications website here. For the current competition, covering the years 2009-2010, there were 275 applicants, of which 129 were successful.

The IPKat is always delighted when intellectual property experts and enthusiasts receive this honour and is thus pleased to offer his congratulations to two stars in the British IP firmament, whose success has been reported today:

Thursday, 25 February 2010

Yesterday evening this Kat attended the UCL IBIL seminar on Trade Mark Law and the Internet, dedicated to an evening of discussion on service provider liability and recent decisions such as L’Oréal v eBay, LVMH v eBay and the numerous Google cases. The Kat wanted a fiery debate on the culpability of third party service providers and to witness the panel and audience taking clear sides, like the parting of the Red Sea. As to be expected, when one is in a room dominated by lawyers, the seminar actually produced an even-keel commentary on current case law and the generally expected positions of the respective parties on either side of the debate. This Kat apologizes in advance that, in summarizing the speeches, she will inevitably do injustice to quality of the panel’s presentations.

The panel Chairperson, Professor Graeme Dinwoodie, commenced the evening by posing two questions:

(1) Should the issues of third party service provider liability be resolved by applying traditional laws to new technological problems or do we need to develop new laws to address such issues?(2) Should our national and international law making force further EU harmonization over and beyond what has already occurred?

As if saving the best for last, it was only the last speaker, Dr Frederick Mostert (Chief IP and Lead Counsel for Richemont International) who went some way in answering these questions.

Henry Carr QC, lead counsel for L’Oréal in the now infamous L’Oréal v eBay, commenced the presentations by stating that giving his speech before the gathered crowd at UCL was much like advocating before the ECJ – except that in this instance the room was packed and the audience looked interested. Carr did well to explain the respective positions and arguments of each side’s respective position in L’Oreal in such a limited time (see this IPKat article for a report of the case). To aid his explanation and L’Oréal’s position, Carr submitted his analogy of a store that sells a mixture of genuine and counterfeit Linx fragrance, for example. If he stood outside the store with a sign that stated “Shop here to purchase Linx”, would he be liable for trade mark infringement given that the store also sells counterfeit products? Under the L’Oréal argument he would be liable. Carr went on to explain the operation of Article 14 of the E-Commerce Directive and the arguments surrounding the granting of injunctions under UK law against third party service providers by virtue of Article 11 of the Enforcement Directive. Before closing, Carr paused to mention the a German cases that held that there was a duty on eBay to take precautions to prevent future infringements of a brand owner's mark once notified.

Cédric Manara, Associate Professor of Law at the EDHEC Business School in France, received more laughs than the other presenters thanks to his engaging presentation regarding the eccentricities and peculiarities of French IP law. He stated that although he was asked to give “The” French perspective he could only really afford the audience “A” French perspective; the reasons for which soon became clear as he rattled through the somewhat unpredictable approach of the French courts over the past ten years. In particular, he cited France’s favourable forum for luxury and brand owners, Sarkozy-style lobbying, generally ignoring EU trade mark law, a high level of litigation, and a lengthy time to “get things done” as all informing the context of the French decisions. Manara explained the inception of the early litigation against eBay and Google as the high water mark of third party liability in France – Hermès v eBay, Dior v eBay, etc. Although France is still a favourable forum for brand owners, Manara suggested that, over the course of a decade of litigation, parties like eBay and Google have been able to educate the French courts about their technology. Such education has now resulted in decisions which appear to indicate that the French courts are beginning to understand service providers’ level of involvement in alleged trade mark infringements. Manara referred to recent decisions - Dior and LVMH v eBay – which held that using a trade mark to attract consumers to a webpage is use and, in the LVMH case, is “parasitism” as eBay benefits from someone else’s investment and therefore should be fined even in the absence of confusion.

Manara concluded with an interesting statistic. Of the 50 or so cases brought against Google in France over the past six years, the claimants’ strategy in who to sue was equally split between Google alone, Google and the advertiser, and the advertiser alone. Manara indicated that this statistic shows that the claimants’ mind as to who is actually culpable for the trade mark infringement is not entirely clear. That statistic informs this Kat, however, that at least two-thirds of brand owners seem to know that you sue where the money is – Google. Manara ended by stating that French courts find that internet users can be easily confused, which may suggest that French consumers are “idiots” or French courts just think they are idiots. This picked up on an interesting point that was mooted later on regarding the usage of “internet users” as opposed to “average consumer”. Are they different? And if they are, how so?

Following on from Manara, Dr Harjinder Obhi, Senior Litigation Counsel for Google, was next in the line up. This Kat, a vocal commentator on all things Google, was especially interested to hear what Dr Obhi had to say about the issue of liability. Dr Obhi stated by reminding the audience that Google is also a brand owner itself and experiences the same issues as any brand owner including serious issues such as fraud and phishing scams were are damaging to Google and their brands. He comically stated that he was not trying to win the audience’s sympathy (which was met the audience’s expected laughter), but that Google understood the issues faced by brand owners. This Kat, despite her views on Google and orphan works, has great sympathy for this argument and does not believe it should be monopolized only for the benefit of luxury brand owners (see this IPKat post). Dr Obhi next briefly schooled the audience in the technology and workings of Google AdWords - also a registered trade mark so “please do not use it as a noun”. He stated that Google’s mission was to “aim to maximize the richness of information available to the user” and that Google does not know what the user’s intention is when they search for XYZ. One of the IPKat’s friends aptly echoed this sentiment later over dinner stating that Google is a “service provider, not a content controller”. Dr Obhi closed his speech by referring to the imminent ECJ judgment in the Google Adwords case on 23 March 2010 by stating that, in the words of the Advocate General, he hoped that “freedom of expression” and “freedom of commerce” will fall in favour of Google.

Dr Mostert rounded off the evening’s proceedings. Prior to commencing his presentation formally, he stated that he was a firm believer in the power of the internet and technology (so much so he has already placed his order for the iPad). Dr Mostert submitted that with all IP law there were extreme views on both sides of an argument and in the absence of absolute rights, IP law was meant to address the balance between these two views. He stated that he held a somewhat unorthodox view on auction sites: instead of rushing to the courthouse he picked up the phone to auction sites, such as eBay, to negotiate their respective positions. He declared that he believed that opening a dialogue with the other side and negotiating with them has achieved the same remedies for his company as what the likes of Tiffany could have achieved at trial in their litigation. He stated that there was a lot to be said for this approach and that, if anything, if you push a third party ISP too hard they will inevitably “come back to bite you” in another way. In support of this contention he referenced eBay’s petition to the European Commission regarding luxury brands' uncompetitive behaviour following one of their numerous court battles against a luxury brand.

To this Kat, ignoring the obvious technical issues and idiosyncrasies of the internet environment aside, the issue boils down to who should bear the burden for removing infringing material online? Is it the brand owner or is it the service provider? Members of the panel seemed to submit that it was the brand owner at first instance who was responsible and then, once notified of the existence of infringing material, it was then the responsibility of the service provider. However, how far does a service provider have to go to ensure that they are not falling foul of trade mark law? Are they expected to become the policing agent of the brand owner? If they are expected to also have a policy of removing infringing content and repeat offenders, what does this policy look like? As to be expected, there was no consensus on what measures a service provider should take, but to this Kat this is the real battleground of the issue. It is not whether existing trade mark law is inadequate for the purposes of online infringement, but, as Dr Mostert asserted, whether the policy underlying the ‘old’ law can inform the proper scope of service provider liability for the future.

The IPKat would like to thank IBIL for organizing yet another interesting and dynamic seminar. To help UCL establish the incredibly important Sir Hugh Laddie Chair in Intellectual Property Law please click this link.

Wednesday, 24 February 2010

Back in December 2008 Mr Justice Arnold delivered a major trade mark infringement and passing off judgment in Hotel Cipriani SRL and others v Cipriani (Grosvenor Street) Ltd and others [2008] EWHC 3032 (Ch) (noted by the IPKat here). That decision has now been subject to the scrutiny of the Court of Appeal for England and Wales (Lords Justices Lloyd, Jacob and Burnton), which today at [2010] EWCA Civ 110 gave the trial judge's analysis a clean bill of health.

Right: the Hotel Cipriani, Venice

To recap, the three claimants were members of the Orient Express Hotels Group. They owned and ran, respectively, (i) the Hotel Cipriani in Venice, (ii) the Ristorante Hotel Cipriani at the Lapa Palace Hotel, Lisbon, and (iii) the Ristorante Villa Cipriani at the Reid’s Palace Hotel, Madeira. The first claimant was the proprietor of Community and UK trade marks for the word CIPRIANI for (among other things) hotels, restaurants, cafeterias, eateries, bars, catering and the delivery of drinks and beverages for immediate consumption.

In 2004 the first defendant CGS opened a restaurant, Cipriani London, usually referred to as "Cipriani". The other defendants were the sole director of CGS and a Luxembourg corporation that owned 60% of CGS and licensed it to use the name Cipriani. Both the second defendant and his father were directors of the Luxembourg (the latter being its Chairman). The Luxembourg company was itself licensed by ATG, a Madeiran company, with CGS, the Luxembourg company and ATG being what the defendants called the Cipriani Group of companies. One way or another, the Luxembourg company wholly owned its licensor ATG and various other companies (Cipriani SpA, Cipriani Industria Srl, Cipriani International Group SA and Cipriani USA, Inc).

The Cipriani claimants sued for Community trade mark infringement and passing off, arguing that CGS’s use of the sign CIPRIANI in relation to its restaurant was a classic case of 'double identity' infringement of same mark, same services. They also alleged that the use of the sign CIPRIANI LONDON infringed under the principle of 'same service, similar mark, likelihood of confusion'. The defendants conceded that their use constituted prima facie case of infringement, but argued that (i) they were entitled to rely on the the 'own name' defence and that (ii) the marks were in any event invalid as having been registered in bad faith.

Left: the Cipriani Restaurant, London

The own-name defence itself gave rise to three issues: (i) did the use of the signs CIPRIANI and CIPRIANI LONDON constitute use by CGS of its own name? (ii) if not, could CGS rely on the names of the second and third defendants; (iii) if the answer to the first or second question was "yes", was such use to be regarded as being "in accordance with honest practices in industrial or commercial matters"?

Arnold J came down heavily in favour of the claimants in this dispute.

* Summarising the jurisprudence that now governs the means by which a court assesses and compares trade marks and then determines whether there exists a likelihood of confusion, he concluded that there was a manifest likelihood of confusion between CIPRIANI and CIPRIANI LONDON. The dominant and distinctive element in the defendants’ sign was CIPRIANI (the word LONDON being non-distinctive for a restaurant in London). That this was so was confirmed by the fact that the defendants and others often dropped the word LONDON. Accordingly the dominant and distinctive elements of the respective marks were identical, as were the services for which they were registered or used. CGS’s use of the sign CIPRIANI withor without LONDON thus infringed the claimants' CTM.

* The applicability of the own-name defence to a company’s trading name (as contrasted with its registered name, ie its real name) would constitute a substantial inroad into the rights conferred by trade mark registration even where the defendant used a sign identical to the registrant's mark, particularly where the company had only just commenced trading. It was unlikely that this could have been intended by the Community legislature. In any event, since neither CIPRIANI nor CIPRIANI LONDON was its CGS's own name, the defence did not apply.

* The fact that the Luxembourg company had licensed CGS's use did not affect the latter's liability -- it certainly did not mean that CGS's use of the signs CIPRIANI and CIPRIANI LONDON had been in accordance with honest practices in industrial and commercial matters.

* On the basis that anything that was not bad faith was good faith, the claimants' marks had been registered in good faith. There was no evidence on which to demonstrate that the applications had been made in bad faith.

* The claimants' action for passing off also succeeded. Not only did they have customers in the UK in April 2004, when CGS's restaurant opened, but they had foreign customers who booked the hotel and restaurants directly, as well as via tour companies and travel agents. The claimants thus had not only a substantial reputation but valuable goodwill.

The Court of Appeal, through Lloyd LJ's 125-paragraph leading judgment, dismissed the appeal on all grounds.

Right: after inspecting both sets of Cipriani premises, the IPKat agreed how confusingly similar their names sounded after a drink or two ...

In doing so, it also had this to say about the protection of well-known trade marks under Article 6bis of the Paris Convention on the protection of Industrial Property Rights:

"Section 56 of the 1994 Act gives protection to "well-known" trade marks, whether or not registered. It gives effect to article 6bis of the Paris Convention. If the Claimants' Cipriani mark is "well-known" for this purpose it gives a right to an injunction to restrain the use of an identical or similar trade mark in relation to identical or similar goods or services "where the use is likely to cause confusion". It gives no right to any monetary remedy. In practice it would only be important if the First Claimant were to lose its registrations, though in theory it could be relevant if there were a defence to the injunction claim under the Cipriani CTM, such as the own name defence. There is no such defence under section 56.".

The IPKat notes the care with which the Court handled the "own name" issue wherever it was raised, emphasising that the key to the use of one's own name being a defence is found in the requirement that such use be an honest commercial practice. Notwithstanding this, the Kat expects the argument of "it's my name so I can use it", pressed as an absolute statement upon an unwilling court, will remain a feature of British trade mark and passing off litigation for many a long year to come, and for as long as there are unmeritorious defendants to keep arguing it.

The IPKat thanks his friend and 1709 Blog colleague Hugo Cox for drawing his attention to Content and Carrier, an impressively presented and well-written weblog on European electronic communications and media law from a talented team of Austrians with both professional and academic credentials. nb: the link to Content and Carrier, broken when this item was posted, has now been mended.

The Inventors Eye is a new bimonthly publication, put out by the United States Patent and Trademark Office (USPTO) for the independent inventor community [says Merpel, if there's one bunch of people who are so cussedly independent that you can count on them never to be a community, it's probably independent inventors]. You can read issue one in full here.

Having visited London's Museum of Brands for the first time, this IPKat team member was most impressed with the sheer volume of its exhibits, given the limited amount of display space. The occasion for his visit was an opportunity to hear the UK government's Minister for Higher Education and Intellectual Property David Lammy MP give away some priceless personal information concerning the brands which were gifted with 'most favoured' status in the Lammy household. It occurred to the Kat that, with a room full of trade mark practitioners listening to a speech by a politician in a General Election year, the word "opposition" -- lodged by the one and feared by the other -- was an obvious common factor. You can read all about the Museum here.

Congratulations are due to Class 46, the European trade mark weblog which has been taken under the benign and supportive stewardship of Euro-TM organisation MARQUES. Yesterday Class 46 received its 1,000th subscriber, 26 months after it began life as a speculative venture in the spread of European trade mark law and brand-related news. The blog has nearly 1,800 searchable items, lovingly composed by an 11-strong team.

The Norwegians are busily celebrating a Big Event of their own. Norway has now taken the necessary steps to join the Geneva Act of the Hague Agreement on international design registration (see Class 99 here). This means that all of Europe's European Union and European Free Trade Association countries are now Hagued-up, which is good news for tidy-minded international design registration applicants. Thank you, Solvår Winnie Finnanger, for this information.

The World Intellectual Property Organization's popularWIPO Magazine has just published issue 1 for 2010 (contents here). From the cover you can easily spot the theme: IP litigation costs. Contributors include IPKat team blogger Jeremy ("Keep it cheap: Ten Tips for Minimizing IP Dispute Settlement Costs", here), his friend and PatLit team blogging colleague Michael Burdon ("The UK: Can a High-Cost Country Change Its Way?", here) and a piece by Berly Lelievre-Acosta, WIPO Arbitration and Mediation Center, entitled "A cost-effective alternative", here, which reminds readers of the alternative dispute resolution options which await those who would prefer not to litigate. Jeremy would like to thank the various readers who sent in their ideas and suggestions for keeping IP litigation costs down, but can't at the moment find where he left the folder with their names ...

Tuesday, 23 February 2010

The IPKat has been busily perusing an undated document which is being circulated through Europe's corridors of IP power by a body calling itself "the Hungarian delegation". It's called Ten good reasons for not distributing the OHIM’s surplus to “users” and, as its name suggests, this document argues against the refund to overcharged users of the Community trade mark system of the sums they should not have had to pay in the first place.

Right: "Charge!" But what about the overcharge ...?

The document reads as follows:

"Introduction

In its “Contribution to the study on the overall functioning of the trade mark system in Europe” the OHIM has once again put forward its proposal that “the remaining accumulated surplus [of the Office]… be returned to users themselves”. This paper is a response to that particular proposal and is deliberately limited to this, although the unsolicited and somewhat provocative “contribution” of the OHIM contains a number of other unacceptable and objectionable elements (such as the comments on the governing bodies or the one-sided, rather extreme views on genuine use). This document is just intended to put forward the ten most important reasons for not distributing the OHIM’s surplus to “users” [Why the use of quotation marks? Is it to suggest that the people who use the CTM system are not in fact users?].

1. Lack of political support

At the joint meeting of the Administrative Board (AB) and the Budget Committee (BC) held on 18 and 19 September 2008, the OHIM’s idea to return its surplus to applicants was discussed in depth and unanimously rejected [Might this not be a reflection on the composition and self-interest of the AB and the BC members, rather than on the merit of the proposal?]. By resubmitting that proposal the OHIM has, therefore, acted against the clear political will of the Member States. Before raising this issue again in a political context, such as that of the study on the overall functioning of the trade mark system in Europe, it should first have consulted the AB and the BC.

2. Illegality

No such refund is provided for by the applicable legislation [But, fortunately, over-charging was provided for ...]. The OHIM’s proposal cannot be implemented within the existing legal framework. It follows that “users” can have no legitimate expectation of this kind of refund [but it's no crime to recommend the enactment of amending legislation, is it?].

3. Lack of logic

Originally, it was foreseen that should the fees prove insufficient for the OHIM’s budget to be balanced, the OHIM would receive a subsidy from the general budget of the EU (i.e. no fee increases with a retroactive effect were envisaged to redress such a budgetary imbalance). This logic should work the other way round, too [It's not logic; it's a proposition that reciprocity should apply and it has no compelling effect]. Therefore, the remaining part of the OHIM’s accumulated surplus should be transferred to the EU’s general budget to be used preferably for IP-related purposes, rather than handing it out to all sorts of “users” [Why the somewhat derogatory jibe "all sorts"? Are we not talking about the businesses upon whose success the operation of the EU economy depends?].

4. No macroeconomic rationale

As about half of the CTM proprietors and applicants are not from Europe, returning the OHIM’s surplus to them would amount to a huge exercise of pumping European money into overseas companies – instead of using it in Europe’s own interests [Presumably the authors would be happy to tell any other trade mark-granting office that it was more than welcome to keep any Hungarian money that it had obtained through excessive charges].

5. No microeconomic rationale

What the OHIM proposes would never happen in the private sector. No company would ever pay back any money to its one-time consumers just because it made an unexpectedly high profit a few years ago [Really? They seem to manage it in the US. Look here, here and here for example]. Equally, it cannot be reasonably expected that those “users” that would receive a refund from OHIM would, at least partly, transfer it to the consumers of their goods and services sold under their CTM or CTMs concerned. (Please note that the OHIM’s applicants can by no means be compared to the shareholders of a private company. Should one be forced to draw such artificial parallels, one would rather compare them to the customers or clients of a company. The OHIM’s “shareholders” are the European Union and its Member States.)

6. Misconception of the role of the OHIM’s fees

Fees, in particular application and renewal fees, are not just there to simply cover the OHIM’s expenses, but they should also serve as the price one has to pay for a monopoly right covering a market of 27 states. This price should be commensurate with the effect the monopoly right can have on this market [If this were true, the fee would be vastly more!]. This element seems to have been totally neglected by the OHIM’s proposal for returning the surplus to “users”.

7. Exaggerated savings – better use of the surplus

The surplus is partly due to the exaggerated savings the OHIM has made to the detriment of the quality of its substantive work, in particular its examination practice, which has by now become so lenient and lax that “anything under the sun made by man” can be registered as a CTM [what a pity that OHIM applies the case law of the European Court of Justice and the General Court]. Thus, the surplus is partly due to the fact that the OHIM currently does not function as it should, namely as an institution exercising public authority and not as a “trade mark factory” trying to please its “clients” at any price, even to the detriment of the quality of examination and the underlying public interest [At the very least, the authors of this gratuitous and unjustified insult owe OHIM an apology]. Should there be a change to that management “philosophy” for the better, the OHIM could use its surplus for improving its operations through e.g.- properly conducting examination as to absolute grounds,- producing search reports by examiners instead of machines only,- fully examining seniority claims,- further developing its IT infrastructure, databases and their accessibility,- revising its staff and recruitment policy, and- surveying the satisfaction of all stakeholders.In addition, the recent fee reductions only affected the “accession fees”, i.e. the fees to be paid for obtaining a CTM. But this approach is certainly one-sided, and it may lead to further tilting the balance in favour of CTMs at the expense of, and to the detriment of, national applicants and national trade mark proprietors. Therefore, a significant (namely, at least 40 %) reduction of the opposition fee and the so-called “cancellation fees” is absolutely called for and already overdue, as this would reduce the costs for parties most affected by the registration of CTMs, somewhat counterbalancing the effects of the fee reductions already carried out.

8. Danger of red tape

In view of the huge bureaucratic machinery proposed for allocating the EUR 50M Cooperation Fund, it is almost unthinkable how complicated and costly the framework for implementing the refund proposed by the OHIM could be – as the total amount to be returned would be EUR 300M. Unless, of course, the OHIM trusts private companies better than national offices [how many national offices would you trust?], and unless the applicable financial and budgetary regulations are less stringent in the case of distributing the income of an EU agency to private entities. In addition, there are a number of obvious practical difficulties that would stand in the way of a meaningful implementation of the OHIM’s proposal for that kind of refund [OHIM has all the necessary data on computer already, which should make the job quick and easy].

9. Favouring further CTMs – to the detriment of national trade marks

Flooding CTM proprietors with windfall profits [so giving back what you shouldn't have taken in the first place is a windfall -- or should that be a "windfall"?] in the form of retroactive fee refund would certainly, and unfairly, make the CTM system even more attractive to “users” – to the detriment of national trade marks [Heaven forfend that applicants might find CTMs attractive!]. In fact, it might deal a final, lethal blow to the national trade marks systems. One cannot, of course, be entirely sure that the OHIM could not live with that outcome.

10. Bad precedent, wrong incentive

Should the OHIM’s proposal for returning the surplus to “users” ever go through, it would set a bad precedent and create a wrong incentive. The biggest CTM owners would press the OHIM even harder for further savings and higher “profits” in order to obtain more refunds in future [Wrong way round: the Unilevers and Procter & Gambles of this world will scarcely notice a few thousand euros, but it can come in handy for small-time applicants]. That would certainly further distort the way OHIM operates and farther distance it from its original public mission".

The IPKat is truly disappointed that a document of this nature should be circulating. He finds it hard to believe that the Hungarians, whom he likes as individuals and respects as a nation, should have come up with this and hopes that it is a hoax or forgery of some sort, which the real Hungarian Patent Office will speedily denounce.

"After the decision of the Benelux Office for Intellectual Property ("BOIP") in ONEL/OMEL and the sympathetic statement of the Hungarian Patent Office (“HPO”) as reported by Class 46 and IPKat earlier, the HPO took a further step to join the new approach regarding the geographical extent of genuine use of a Community trade mark.

The HPO has adopted a new approach in its decision regarding the CITY INN/C CITY HOTEL opposition, in which it has not accepted genuine use of a CTM used in only one Member State (in this case the United Kingdom), even though all other use criteria have been fulfilled, namely the nature, time and extent of use as well as the use relating to goods/services for which the mark was registered. You may access an English summary of the decision here.

The HPO – in line with the BOIP decision – argues that the contradictory Joint Statement of the Commission and the Council is not legally binding (see Antonissen,C-292/89). The HPO also relies on Ansul (C-40/01) and La Mer (C-259/02), adding that PAGO is relevant only when assessing the repute of a trade mark and that, in such cases, the repute can typically not be analyzed, since the trade marks cannot be taken into account due to the (geographically) insufficient use of the mark.

The new practice will be presumably continued until a Hungarian Court will confirm or deny it. Hungarian Courts may certainly also raise a question for reference to the ECJ for preliminary ruling.

[Background: the HPO and the OHIM held a regional conference on the coexistence of the Community and national trade mark systems in Europe in November 2009. For those seeking a deeper understanding of this issue, see the presentations of Mr Edmond Simon, Director General of the Benelux Office for Intellectual Property and of Mr Mihály Ficsor, Vice-President of the Hungarian Patent Office]."

This morning Mr Justice Arnold, of the Patents Court for England and Wales, produced a whopping 250 paragraph (50 page) judgment in Intervet UK Ltd v Merial, the University of Belfast and the University of Saskatchewan[2010] EWHC 294 (Pat), an exciting dispute over European Patent (UK) 1 386 617 for a "method for the in vitro diagnosis of type II porcine circovirus infection and diagnostic reagents". The result was a finding that Merial's patent was invalid and that, even if it had been valid, it had not been infringed.

The patent was for a means of diagnosing a disease known as post-weaning multisystemic wasting syndrome ("PMWS"), a widespread disease affecting many herds in Saskatchewan and Alberta. A chronic, insidious disease in young pigs, PMWS caused weight loss, tachypnea, dyspnea and jaundice. The patent itself was affected by some none-too-insidious prior art: (i) a submission containing a polynucleotide sequence for porcine circovirus which was published on the National Center for Biotechnology Information website and (ii) international patent application. If the patent, in its original form or as amended, could claim an earlier priority date [which it could not], it might be safe, and there was also a problem of inventive step to overcome. Cross-checking his conclusion using the European Patent Office's problem-solution approach discussed by Lord Justice Jacob in his recent judgment in Actavis v Novartis(noted here by the IPKat, in what is this weblog's all-time most commented-upon post), Arnold J concluded that the skilled team of researchers could have solved the problem before them without needing to look beyond the relevant prior art, so obviousness was proved.

This judgment is far too long for the IPKat to absorb all in one go, so he reserves the right to write more about it later. As usual, he welcomes readers' comments. Merpel says, not so long ago the learned judge was ruling on Spam; now he has graduated to pigs ...

Yesterday Peter Hustinx (left), the European Data Protection Supervisor, issued a press statement expressing his disappointment for not being “consulted by the European Commission on the content” of the Anti-Counterfeiting Trade Agreement (ACTA) which was described by the statement as being “an agreement which raises significant issues as regards individuals’ fundamental rights, and in particular their right to privacy and data protection.” Hustinx stated:

"Whereas intellectual property is important to society and must be protected, it should not be placed above individuals' fundamental rights to privacy and data protection. A right balance between protection of intellectual property rights and the right to privacy and data protection should be ensured. It is also particularly crucial that data protection requirements are taken into account from the very beginning of the negotiations so as not later on having to find alternative privacy compliant solutions."

Hustinx also stated that he was concerned regarding the lack of publicly available information regarding the ACTA negotiations (see previous AmeriKat reports here and here) and specifically recommended that a “public and transparent dialogue on ACTA” be established to ensure that its proposals are compliant with EU privacy and data protection requirements.

Last Fridaythe chapter concerning the allegedly draft provisions of ACTA entitled “Enforcement procedures in the digital environment” was leaked online. The IPKat has summarized some of the key provisions for its readers below:

Section 2 states that each Party to ACTA confirms that civil remedies (as well as limitations, exceptions, or defences with respect to the application of such remedies) are available in its legal system in cases of third party liability for copyright and related rights infringement. “Third party liability” is defined as the liability for any person who “authorizes for a direct financial benefit, induces through or by conduct directed to promoting infringement, or knowingly and materially aids, any act of copyright or related rights infringement by another.”

Section 3 echoes the notice and takedown and Safe Harbor provisions contained in the US’s Digital Millennium Copyright Act (DMCA) (see this IPKat post that outlines the Safe Harbor provisions in action). Section 3 begins bystating that each Party recognizes that individuals using third party online service providers may engage “in copyright or related rights infringement” but that there is also substantial “legal uncertainty with respect to application of intellectual property rights, limitations, exceptions and defenses in the digital environment” which may present “barriers to the economic growth of, and opportunities in, electronic commerce.” The section then states that Parties should provide limitations on a service provider’s liability for infringing activities provided that the service provider:

(1)adopts and reasonably implements “a policy to address the unauthorized storage or transmission of materials protected by copyright or related rights”; and

The only example this document gives of the type of policy to which (1) applies is one that provides for “the termination in appropriate circumstances of subscriptions and accounts in the service provider’s system or network of repeater infringers.” To this Kat, the fact that only one example of a policy was given and this policy mentions “the termination of subscriptions and accounts” of “repeat infringers” points to only to one thing – a “three strike” type rule. If a three-strike policy was the only policy in the contemplation of the drafters at the time of formulating Section 3, how much scope does a service provider really have in formulating a policy that does not include a “three-strike” type rule?

Coincidentally, yesterday the UK Government stated that they were going to abandon the proposal of a “three strike” rule in the proposed Digital Economy Bill. The Guardian reports that following a petition to Number 10 regarding the proposal, the Government now states that it “will not terminate the accounts of infringers – it is very hard to see how this could be deemed proportionate except in the most extreme – and therefore probably criminal – cases." How this new position may affect the UK’s negotiations of Section 3’s conditions on liability limitation is unclear to this Kat.

This Kat will be at tomorrow’s, now sold out, UCL IBIL Brand Seminar - Trade Marks and the Internet (see link here). In the spirit of the issues being discussed at the event, this Kat would be interested to hear anyone’s views on this developing issue of third party service provider liability.

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